WASHINGTON, May 14 (Reuters) - Republican U.S. Senator Marco Rubio, who is considered crucial to the passage of an immigration law overhaul, on Tuesday vowed to fight for a biometric system that would track foreigners entering and exiting the country after a Senate panel rejected the idea.

Rubio and seven other Republican and Democratic senators, known as the "gang of eight," have crafted a sweeping bill that would revamp the immigration system, increase work visas and put millions of illegal immigrants on a path to citizenship.

In its second day of examining the legislation, the Senate Judiciary Committee voted against the Republican amendment that would have made it easier for the government to track illegal immigrants and other foreigners who have overstayed their visas.

The amendment would have required a biometric system at every point of entry in the United States before illegal immigrants would be eligible for permanent residency or a green card.

The biometric system is estimated to cost about $25 billion and uses technology such as iris scans and fingerprinting to identify people.

Citing the price tag and saying it would delay citizenship under the program, two of the Republicans who helped craft the bill sided with Democrats to defeat the amendment 12-6. The biometric system idea could potentially deter Democrats from voting for the entire bill if it delays illegal immigrants from becoming citizens.

In an effort to keep the legislation intact, the bipartisan gang of eight senators agreed to work together to block amendments that could kill the bill.

But Rubio's office said he was disappointed by the vote and would fight to add biometrics to the country's exit system when the bill is considered by the full Senate later this year.

"Having an exit system that utilizes biometric information will help make sure that future visitors to the United States leave when they are supposed to," his spokesman said.

Immigration reform advocates hope Rubio's popularity with conservatives will help sell the bill to his party.

The committee has already succeeded in rejecting other Republican attempts to beef up border security in ways that go beyond the bill and could jeopardize the path to citizenship. So far, the panel has considered around 60 of the 300 amendments introduced.

STUDENT VISAS

In response to the Boston marathon bombings and September 2011 attacks, the committee approved two Republican amendments to close loopholes in the student visa program.

One amendment would require data from the Student and Exchange Visitor Information System to be transferred to customs and border patrol officers.

In Boston, one of the bombing suspect's friends who allegedly helped remove evidence was allowed to re-enter the United States even though his student visa had expired.

The other amendment would prohibit flight schools from offering student visas unless the school was accredited by the federal government. Two of the 9/11 hijackers had obtained student visas to attend flight schools, according to lawmakers.

HIGH SKILL WORKERS

Senators had been due on Tuesday to consider changes to work visa programs and were under pressure from businesses to make it easier to recruit highly skilled workers from other countries and bring in more foreigners to do manual labor.

But debate on those issue was postponed.

High-tech companies and other businesses are pushing for changes to provisions that would require firms to seek American applicants first for any job and that would prohibit the displacement of U.S. workers.

The companies are backing a series of amendments by Republican Utah Senator Orrin Hatch concerning the skilled worker visa program known as H-1B.

The AFL-CIO labor organization opposes the amendments, saying they would be unfair to American workers.

Hatch, whose support is important because it would increase pressure on the Republican-led House to work on legislation, said he has had conversations with the Senate gang of eight and has made clear the H-1B visa issue may be pivotal to his vote.

"I think they're taking me seriously. Let's put it that way," Hatch said of the Senate gang. "And I hope they do because if they don't, I'm not going to support this bill."

Andrea Zuniga DiBitetto, legislative representative at the AFL-CIO, said she was "troubled" that Hatch would suggest that changes to the H-1B visa program might be the price of his vote.

It is unclear whether the committee will consider Hatch's amendments when it meets on Thursday. The gang of eight was discussing them Tuesday night and his proposals could be considered as a larger package of amendments when the full Senate examines the bill.

At the end of the day-long session, Senate Judiciary Committee Chairman Patrick Leahy said he hoped to get through many issues by week's end and threatened a Saturday meeting if work moves too slowly.

As the committee debated changes to the nearly 900-page bill, a group of conservative Republicans in the House of Representatives vowed to "tear up" and defeat that bill if it reaches their chamber.

They derided the Senate legislation as little more than "amnesty" for those who have come to the United States illegally or overstayed their visas. If enacted, they said it would cost U.S. taxpayers trillions of dollars.

Representative Steve King of Iowa told reporters that House conservatives were launching a public relations campaign consisting of floor speeches, opinion articles and other actions to "get the message out that there's another viewpoint here. It's not the one that's being stampeded in the Senate and may be stampeded in the House."

Representative Steve Stockman of Texas, referring to the eight senators who wrote the Senate's immigration bill, said, "They have a gang of eight. We're going to have a gang of millions" who, Stockman said, "will rise up against" the bill.

Instead of comprehensive immigration reform, these House conservatives want new steps to secure the southwestern U.S. border against illegal crossings before considering other changes to immigration law. (Reporting by Caren Bohan, Rachelle Younglai and Richard Cowan; Editing by Vicki Allen, Andrew Hay and Cynthia Osterman)

California's Proposition 187 was submitted to the voters with the full support of then Republican governor Pete Wilson. It essentially blamed undocumented immigrants for the poor performance of the state economy in the early 1990s. The law called for cutting off benefits to undocumented immigrants: prohibiting their access to health care, public education, and other social services in California. It also required state authorities to report anyone who they suspected was undocumented.
<strong>Status:</strong> The law passed with the support of 55 percent of the voters in 1994 but declared unconstitutional 1997. The law was killed in 1999 when a new governor, Democrat Gray Davis, refused to appeal a judicial decision that struck down most of the law. Even though short-lived, the legislation paved the way for harsher immigration laws to come. On the other hand, the strong reaction from the Hispanic community and immigration advocates propelled a drive for naturalization of legal residents and created as many as one million new voters.